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Speaker 1: Ah, So let's just say a self storage down the

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street was a hotterbox, Well yours in your park, you

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can get fifty or sixty now they would rather write

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from you. One is closer and it's in their community.

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Two is cheaper than the one down the street. So

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there's definitely other ways to maximize profits in revenue in

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molall parks.

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Speaker 2: You're listening to Carrie Letz's Financial Survival Network, where you

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get valuable information you just can't find anywhere else to

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thrive in today's trying times. You need the Financial Survival

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Network now more than ever. Go to Financial Survivalnetwork dot

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com and get your free newsletter and gift. Financial Survival

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Network now more than ever.

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Speaker 3: Welcome you are listening to and watching the Financial Survival Network.

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I'm your host, Carrie Leutz. It's February third. Hard to

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believe we made it through January. The country still somehow function.

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I'll go figure nobody can quite figure it out, but

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I guess it's when the ship is sailing. The ship

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keeps sailing until something stops it from sailing. But if

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you want to sail, you want to excel, then you

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need to listen to my next guest Walter Johnson. He

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is a mobile home park magnet. And Walter, it's great

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to have you on the show. You know, you've been

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in real estate. You retired when you were twenty seven,

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then you got bored, and then you somehow discovered mobile

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home park. So how did that evolution take place?

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Speaker 4: Walter? Well, yeah, well, I guess the the re tyrant part, right.

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Speaker 1: So I had friends that when I was living in

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Denver and they had nine to five lived in his

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high rise on a nineteen four beautiful view, and they

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want their word from their nine to five And I

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stayed home and I was trigging a bottle of wine

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every day waiting for our freezy at home.

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Speaker 4: So that gets boring after a while.

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Speaker 1: You can get back to work or become alcoholic, right,

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So yeah, I just chose to get back to work, right.

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Speaker 3: Yeah, twenty seven is too young to retire, man, let's

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face it, come.

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Speaker 4: On, Yeah, but you think so, are you? Like, Hey,

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this is actually a great bucket list. I'm retired by

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the age of thirty, and it's sound right in theory,

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but it's the American dream. Yeah, exactly. I don't.

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Speaker 1: I don't think that's the American dream. So I think I'll

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keepboard until I expire.

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Speaker 3: Nightmare is an there man that for sure, Key is

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not to retire at twenty seven. It's to be able

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to retire at twenty seven.

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Speaker 4: Right, yes, and keep going absolutely.

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Speaker 3: Yeah. So, like many of you out there have a

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very negative connotation of mobile home parks. You think of

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trailer trash, you think of meth labs, you think of

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a bunch of cars up on blocks, and you know,

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you have very negative impressions of the whole space. But

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it really isn't like that, is it, Walter, No.

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Speaker 4: No, no, I'll give someone. I'll give your audience a secret.

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Speaker 1: So in mobile home parks, usually like there's a city

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or county inspector that I actually goes, and there's park

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roles so that the home actually has to half you know,

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you can't have any cracks or bust out windows. They

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have that scurrying on the homes. They have to keep

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their homes in a certain like a certain condition. If not,

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then you can't bring in new homes and actually sell

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them because the city our county inspector goes and says, well,

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this park is not up to our standards. Therefore you

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have to get it up to our standards to be

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able to bring in new homes, so they really regulate them.

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And I think when you when you actually go into

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a park, you'll look at it and saying, yeah, this

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is actually relatively clean. And I like that idea versus

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just buying a house in some random subdivision and you

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can't control the subdivision.

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Speaker 3: Right, So and then it becomes a question of like

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who your tenants are or how do you work it?

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Do they own they purchase the trailer from you and

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rent them in rent of space?

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Speaker 4: Absolutely? Yes, yep.

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Speaker 1: And we do our our same background checks, same credit checks,

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same income verifications, so we do the same I would say,

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really similar to let's say apartment building aura or a

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single family rental.

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Speaker 3: What's the average cash flow on this type of deal

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we're getting.

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Speaker 4: I mean, if we can get the.

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Speaker 1: Cap rate in the indust rate like two or three percent,

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we're right around about twenty to thirty percent caption and

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cash return.

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Speaker 4: And that's when we look which is.

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Speaker 3: Nice, which no wonder the sophisticated investors private equity have

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gotten into it. But I can't see some Wall Street

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firm or Miami firm because all the hedge funds, everyone

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knows they've all moved down to Florida now to escape

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New York. I can see them effectively managing a mobile

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home park.

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Speaker 4: No, they manage it from the ivory tower. I would say, right,

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we're managing boots on the ground. So we kind of

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you know, we intersect at times.

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Speaker 1: But you know, they have a ton of capital that

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they get for sheet and they're able to to you know,

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manage from an office in let's say Florida or New

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York or Chicago or LF.

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Speaker 3: So a cash on cash return twenty thirty percent? Is

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there a room to upgrade these parks when you buy

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them to value ads as we call them, or they're

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extra spaces you can put in put in more units?

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Do you upgrade the units?

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Speaker 4: Yeah, upgrade but in more more homes.

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Speaker 1: If you have a you know, vacant house or vacant

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lots that that don't really fit home, you can someone

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you can put it. Someone can use that for storage,

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or you can you can put self storages. Right, so

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self storage is actually you know a great asset. But

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if you actually have some extra land on in a

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mobile park, you can put a mini storage on there

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and actually charge you know, fifty sixty bucks a moth

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and compete with the self storage down the stream.

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Speaker 4: Very cool, and so I'm all right.

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Speaker 3: How much did you say they bring in a month

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on average?

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Speaker 1: So let's just say a self storage down the street

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was a hotterbox, Well, yours in your park, you can

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get fifty or sixty. Now they would rather write from you.

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One is closer and it's in their community. Two is

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cheaper than the one down the street. So there's definitely

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other ways to maximize profits in revenue in my wall parks.

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Speaker 4: Interesting.

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Speaker 3: Interesting, So what's the biggest drawback to this space?

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Speaker 1: The biggest drawback what I'm facing is that it's not

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I mean, you will make money, but you're you're you're

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of course, nothing's for free, I guess in life, right,

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So you're still working hard to find deals, You're still

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working hard to bring in new homes, so there's still work.

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So even though you're actually making money, I wouldn't say

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it's passive.

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Speaker 4: I al would say it's it's it's proactive in that right.

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Speaker 3: So when you're getting into this, when you buy a park,

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you're buying it for cash. Can you find nance these

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things you can finance? So right now, I think raids

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are probably seven to seven point seventy five. I think

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we got we got a cool from a lender. However,

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right now, if you talk to a seller and are

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usually open to sellar carries or sellar financing, we can

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get a rate cheaper than that.

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Speaker 1: So that's actually a great point. I'm glad you brought

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that up. It's because if you actually buy a park.

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Speaker 5: And it's an a cap, right, so eight a cap,

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but then you can actually have the seller finance seat

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for six percent, and especially if it's great six percent

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inches only, then you're actually doing.

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Speaker 4: Really well double digits returns.

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Speaker 1: Now, if you decrease expenses and raise the rents, now

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you're at you know your your above twenty percent cash

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on cash return.

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Speaker 4: Gotcha?

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Speaker 3: And uh, all right, So, like what are the red

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flags when you look at a trailer community.

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Speaker 4: Let's say I better pass this.

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Speaker 1: One by, yes, so we you know, we get a

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lot of those a lot of those red flags. So

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one is low occupacy too, is that it's just not

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in the right I want to say neighborhood, but it's

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not in the right area, so the population is not there.

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So if you look at let's say a part and

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the homes in the area about one hundred thousand, one

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hundred and twenty five thousand dollars like a single family home,

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you actually don't want to buy. That part is the

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reason being is because with lobbyns and you're selling a home,

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you're competing with that single family home.

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Speaker 3: Right, So you okay, And basically most communities are adverse

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to you opening or building new mobile home communities, right,

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and therefore the supply is restricted.

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Speaker 1: Yes, yeah, so the supply is restricted, but the demand

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is going up, so we definitely have a conundrum. I

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would say, when you look at the mobile home park

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in a particular area, they use those those that revenue

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for taxes to pay for schools or whatnot in that

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community monthly. The cities and counties don't make a lot

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of mon audio on mobile home parks, therefore they do

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not like them.

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Speaker 4: Plus, I would see the average person.

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Speaker 1: In a subdivision saying I don't want a mobile home

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park in my neighborhood.

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Speaker 3: So you do have that state You got nimby people, right, yeah, yeah,

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you got you know, please anybody building anyone building new ones.

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Speaker 1: There's a few, but I haven't met a lot and

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I don't know a lot of them that said, hey,

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here's actually a plot of land, we're going to build

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a mobile home park, and actually was successful.

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Speaker 4: It takes years.

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Speaker 3: Maybe you could do it in Alaska or something or

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some remote area with.

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Speaker 1: Yeah, it is anything like that right towards you know

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the good old boys system like a handshake. You probably

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build ten, you know, homes in that particular park, but

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you know it takes years. And by the time you

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build those ten and you see the time you spent

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in in the income you're generating human as with buy

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one that's already existing and cash they want right all.

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Speaker 3: Right, Well, hey, anything else you want to tell us

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about this opportunity?

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Speaker 4: Yeah, I think for your for your audience and your listeners.

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Speaker 1: I think you mentioned something in the beginning of this

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in the segment that the private equity companies in these

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big wigs are coming into buying parts. That is true,

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but there's still opportunity for you know, your listeners or

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just people in general to actually buy mobile home parks

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and actually have a I would say, a stable cash

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loan compared to I think it's even better to partment

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though these are Sego family homes, So I think there's

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definitely still opportunity. I don't want to pake this picture

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that since we're in luck, we're in in. Are these

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other big wigs are in that that this opportunity is

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lost and that's not the case.

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Speaker 3: All right, excellent, all right to thank gutting questions for

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Walter myself, shoot me an email Walter. How do we

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reach you? How do we connect with you on the web?

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Speaker 1: Yeah, yeah, reach out to me so you can email

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me Walter at Sonoscapital dot com or give me a

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call on my office forty zero six seven four two

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zero three five.

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Speaker 3: All right, And the links are in the show notes

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to this interview on Financial Survival Network dot com. When

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you visit there, just got to click it. And I

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would just ask that when you stop by, you opt

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in for our free newsletter, like over sixty seven thousand

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other FSN members have. And Walter, appreciate you coming on

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interesting investment proposition. We'll talk to you again soon.

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Speaker 4: Thank you appreciate it.

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Speaker 2: Thanks for listening to carry Letz's Financial Survival Network, your

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solution to today's trying times. For the latest, go to

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Financial Survivalnetwork dot com. Financial Survival Network now more than

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ever